Not all shopping centres are recovering from Covid the same

While high street shopping appears to be strong and better than pre-Covid, for at least most of the stores I have seen data for, in shopping centres it is a different story.

Retailers in some centres are doing well while some in other centres are down significantly on 2019 trade.

I’d like to see state and federal governments work together to capture accurate data to assess the situation, to help us understand how shopping centres, overall, are performing in 2022 compared to pre-Covid and, then, how each centre is performing. 

I suspect an independent study would reveal significant differences in the performance of each centre. I am sure we would see some centres have bounced back while others have not. It is in that second group, where tenants are dealing with annual rental increases of 5% and more where we may find significant financial pressure, brought on by Covid.

Any study should only be about understanding the situation, and not about laying blame. If one centre is performing poorly while another is performing well, it does not mean the poorly performing centre is being run poorly. There are many factors that could be driving the different results. We can’t consider that until we have the data. That’s why a government-led study would be useful.

While landlords have sales data, their interests are too vested, too narrow, for that to be of value nationally. An independent assessment of the situation would be helpful, especially for the independent retailers in these centres.

In one situation I was looking at this week, revenue is stubbornly sitting at 20% less than in 2019 for a vibrant and appealing business that is engaged on social media and undertaking other marketing to attract shoppers. Their business is in a category that is strong out on the high street.

In another situation, revenue is down 15% which nearby retailers in the same category are up 20% … and the nearby retailers are doing less marketing and offer a less appealing (in any opinion) experience than in the shopping centre.

But this post is not about specific retailers. Rather, it is a call for a national assessment of retail performance in shopping centres so that we can understand if there is a problem, and if so, the centres in which the problem is amplified. Again, landlords are unlikely to drive this. That’s why I hope governments engage.

With most of the Covid support now gone, small business retailers have few options. Those in shopping centres that are yet to be back at pre-Covid trading levels are facing operating costs that, for some, will be unsustainable. No one wins from that – the landlord, governments, the community, the owners. The sooner we have data to understand if there is an issue and the scope of it the better.